House holds key to slots at racetracks

Racetrack developers and Gov. Ed Rendell are betting that the state Legislature will authorize slot machines or video gambling at state-licensed horse racing tracks.

On Thursday the state Senate voted 27-22 to pass legislation allowing video slot machines at state-licensed horse racing tracks. State Sens. Sean Logan, D-Monroeville, and Jim Ferlo, D-Pittsburgh, voted for the bill. Sen. Jane Clair Orie, R-McCandless, voted against it and did not return calls asking about her vote.

Logan and Ferlo said the bill has many safeguards such as not allowing the use of credit cards for gambling at the track video slot machines. Logan said the revised bill creates a $25 million annual fund that will give about $10,000 to every volunteer fire, rescue and ambulance company. Other money would go to state economic developers.

“I campaigned for property tax relief and getting a consistent mechanism for volunteer fire and rescue companies,” Logan said, adding that he likes the revised bill. “I don’t gamble, but we need to find a way to lower property taxes and folks are leaving the state now anyway to gamble.”

A Penn State University study estimates such a move would create 17,700 new jobs. Although in favor of slots at race tracks, Logan doubts he would support broadening the gambling horizon through amendments that would add Keno or riverboat gambling to the state.

Ferlo said he is not in favor of the proposed Keystone Downs horse racing track in Harrison Township and he doesn’t like any of the plans seeking a state thoroughbred racing license. He might vote for limited use of video slots in downtown Pittsburgh he said.

Attention now focuses on the state House of Representatives.

Many of the Valley’s representatives expect the Senate bill, which, among other things, charges a $50 million fee to tracks to use slots, will be heavily amended.

He thinks track-based slot machines would add to the tax base and would be a positive development like the Pittsburgh Mills shopping and entertainment project under way in Frazer.

A Pittsburgh Mills executive said the company would not comment about the proposed $100 million Keystone Downs, which a developer wants to build about 15 minutes away along Route 28, or about video slot machines.

Dermody also likes the Keystone Downs pledge to give the Pittsburgh Penguins $60 million over 20 years to help pay for a new arena.

“This is a real good idea,” said Dermody, who supports Keno games in restaurants and bars to attack the state’s deficit.

Similarly, Rep. John Pallone, D-New Kensington, said he will offer an amendment to allow two slot machines in any place with a liquor license.

“I don’t have a track in my district,” he explained. “Depending upon how you drive, The Meadows in an hour or an hour and a half away” and that track has no direct positive financial impact on his district, he said.

Pallone likes Gov. Ed Rendell’s plans to use some of the proposed slots money to reduce property taxes and to help fund education.

While a poll showed that most people in the district wanted video slot machine gambling, Pallone said he also received a large number of letters urging him to oppose the plan.

Representative Jeff Habay, D-Shaler, said he voted against gambling and would take a “very careful look” at it this time.

He wants more private funding used to build a new Penguins arena and said he favors what happened in Philadelphia. Only about $7 million in state money was used for the new Flyers’ hockey arena., he said. “That’s an excellent model.”

Habay fears his colleagues will try to add riverboat gambling so he will prepare an amendment requiring that local referendums be passed before riverboat or track-based slot machine gambling would be allowed.

“I don’t want people in Philadelphia or Erie or Altoona voting to decide they will put a riverboat in my district,” he said.

Habay said an estimated $300 million generated by race-based slots would “only be a drop in the bucket” to fill a huge state deficit anyway.

State Rep. Jeff Coleman, R-Apollo, said he expects to lead the charge against gambling.

He opposes gambling for moral and economic reasons. He is concerned that some of the amendments may open the door for Native American casinos that would not necessarily be regulated by the state.

“We know there are about 1.5 million gambling addicts,” he said, referring to a University of Illinois study and a study by the Pennsylvania Family Institute. He predicts the state will pay $2 or $3 for every $1 spent on gambling because of resulting society problems.

Coleman also said the $50 million slots license proposed in the Senate bill is a “90 percent discount on the estimated value” of what it should be and called it a “massive corporate giveaway.”

Coleman disagrees with Rendell’s idea to use slots money to improve schools.

“There is a need to finance schools through the front door, not through a unreliable back door plan” that he said is irresponsible.

Other area representatives did not return calls for comment.

Chuck Biedka is a Tribune-Review staff reporter. You can contact Chuck at 724-226-4711, cbiedka@tribweb.com or via Twitter .

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